The Palm Beach Post reports from Florida. "From 2000 to 2005, the bookends of the boom, the median price of an existing home in Palm Beach County and the Treasure Coast shot up close to 200 percent. The result was that a number of first-time home buyers resorted to interest-only loans, no-down-payment loans, adjustable-rate mortgages and option ARMs to stretch their buying power."

"Now those ARMs are beginning to reset, which means higher monthly payments.'As ARMs adjust higher, and as tax and insurance bills surge, more homeowners can't afford to live in their houses,' said Mike Larson, an analyst for Weiss Research."

"However, don't be so quick to point a finger at ARMs, says Jim Sahnger of Palm Beach Financial Network in Sewall's Point. 'The majority of those in trouble now aren't buyers who took out ARMS,' Sahnger said, 'but rather those who bought investment homes they meant to flip and have been unable to do so. They never anticipated they'd be competing with the builder who's selling homes for less than the mortgage they have on their house.'"

"In build-happy St. Lucie County, foreclosures in the third quarter of this year soared 68 percent compared with the third quarter of last year, 2.5 times the rate in Palm Beach County, records show."

"Weary of waiting for condos to come out of the ground, 24 would-be buyers of Palladio Terrace have sued the project's Miami developers for the return of their deposits."

"This spring, with no building permit in sight, several buyers were ready to take their deposit money off the table. 'We have had virtually no response except an offer to transfer our deposits to one of their properties in Miami,' said Jack McGregor, one of the people suing Merco."

"Both Meruelo and Merco CFO Tony Castro have said they are hoping that the season, with its influx of out-of-town buyers, will help Merco push past the sales threshold needed to meet key construction loan criteria."

"In the meantime, money demands are stacking up. The company that sold the Flagler property to Merco is suing Meruelo over a $5 million bonus linked to the sale. Delinquent property taxes now total more than $700,000, according to Palm Beach County tax collection records."

The Sun Sentinel. "Shares of Technical Olympic, based in Hollywood, dropped 35 percent. The shares had fallen 49 percent this year before Tuesday's decline. Technical Olympic said it had received a demand for payment from Deutsche Bank Trust Company America related to financing it provided in connection with its Transeastern Joint Venture."

"In a letter to Deutsche Bank dated Monday, Technical Olympic said the venture's 'problems" are a result of its highly leveraged capital structure and 'adverse market conditions.'"

The Naples News. "More layoffs could be on the way at Bonita Springs-based WCI Communities Inc. CEO Jerry Starkey said work force costs would be reduced about 15 percent through the end of the year. 'Times continue to be challenging with much lower aggregate demand resulting in lower growth,' Starkey said, referring to the company’s sliding statistics."

"The worst offender in the turn of WCI’s fortunes? Southwest Florida. 'Southwest Florida ... that’s the area (where) we see the biggest decline year to date,' Starkey said. Sales in Southwest Florida are down about 60 percent for the year, while Tampa is down about 30 percent and the Panhandle about 7 percent."

"Traffic through the sales centers, something the home-building industry looks at to predict future sales trends, was down 59.5 percent for the third quarter compared to a year ago. The weakest segment in sales and traffic was active adult communities in Southwest Florida."

"The condo market in general is suffering, Starkey said. 'We are seeing very low demand for buyers in the tower market so we did not start any new buildings this year,' he said. Next year will likely be the same, unless market trends change."

"Whether trends will change is hard to predict, said Jim Dietz, WCI’s COO. For the year, the company will have a negative cash flow of about $100 million. 'That’s a bit of a change from prior periods and reflects continued slow sales and higher defaults,' Dietz said."

The News Press. "The 15 percent cut announced Tuesday amounts to about 570 workers based on the company's listed roster of 3,800 employees. WCI spokesman Steve Zenker said the reduction is complete. The staff cuts, including payroll, incentive and benefit incentives, are expected to save the company $60 million annually."

"A $14 million charge for walking away from land options for three projects. Most of that money came from options on land for the Sabal Bay golf course community in southern Collier County. 'We walked away and left $11 to $12 million on the table because we didn't think it would be prudent to market a golf course community at this time,' Starkey said."

The Herald Tribune. "Starkey said that for the next several quarters, WCI will focus on generating cash flow and reducing debt. Eight towers are expected to close in the fourth quarter of 2006, with another six expected to close in the first half of 2007."

"'We are carefully monitoring the tower closings, as collecting these tower receivables is a key driver of our cash flow and debt reduction during this slower demand period,' Starkey said."

The Orlando Sentinel. "Beazer Homes and Toll Brothers, major home builders both active in Central Florida, reported weaker financials on Tuesday with warnings of more softness to come."

"CEO Ian McCarthy said that the company has taken steps to reduce overhead and capital spending as the company prepares for fewer closings in fiscal 2007. In September and October alone, the company pared about 1,000 jobs, or 25 percent of its work force, to brace for less work in the coming year."

"In the Orlando area, the company recently laid off about 50 employees, about 40 percent of the staff, according to local employees affected by the job cuts. McCarthy said Beazer has not seen any evidence that a rebound is imminent in the nationwide new-home market, with excess inventory, orders falling, and contract cancellations rising."

"Other builders with Central Florida operations have been trimming staffs in recent weeks in anticipation of a slower 2007, including Masterpiece Homes, a Volusia County-based builder, which cut 30 positions, or about a third of its work force."

"Main Street USA, a bankrupt Kissimmee company whose majority owner has been arrested and jailed by the FBI, used appraisal fraud in selling condominiums in southwest Orlando to investors, attorneys said Tuesday in U.S. Bankruptcy Court in Orlando." "Richard Epstein, lead attorney for a lender owed more than $13.5 million on The Villas at Waldengreen condos, said buyers 'paid way too much. The unit values were fraudulently inflated. This, unfortunately, was a fraud.'"

"Attorney Frank Wolff, who is representing about 70 condo owners, said appraisals were put together falsely showing photographs of renovated apartments when the units being appraised had not been fixed up."

"Chapter 11 trustee Lewis Freeman said the property isn't even generating enough income to cover expenses and he urged the court to abandon the asset. Paul Singerman, Freeman's legal adviser, said it's doubtful the property could generate the amount projected by the appraisal."

"Roy Kobert, also representing the lender, said the only way the property could generate $21 million 'is if we get 176 more victims.' More than 100 investors and condo buyers have money at risk. ""